Democrats & Liberals Archives

The Anatomy of Poor Regulation

What are Credit Default Swaps? Are they stocks? No. Are they bonds? No. Are they insurance? Yes, but they’re not considered such for the purposes of regulation. Are they bets? Yes, but not even regulated the way betting is regulated in Los Vegas! This is what took down our economy, not Fannie Mae, not low-income borrowers who were screwed over on their loans.

Say a big investor buys a bond from a company. But the investor is worried about the company's ability to pay off that bond. The investor turns to a third party like AIG, for example, and buys protection in the form of a credit default swap contract. AIG agrees to pay the investor the value of the bond in the event the company defaults on it. The issuer of the credit default swap doesn't write this insurance for free. It gets a fee, usually a percentage of the value of the bond.

This is the bad part:

And since these contracts are not considered "insurance," Greenberger said, the companies that guarantee the bonds are not required to keep enough capital on hand to pay them off in the event of a default.

There are over fifty-two trillion dollars worth of this stuff out there. If they had had the money to pay all these things up (I'm not sure, but I think there isn't enough money in the world to pay these things off.)

Now don't get me wrong, since these things are essentially insurance against default, and most people won't, most of these are probably good. But how do you know?

The problem is that owners of the mortgage bonds don't know what the bonds they are holding or trading are worth. If you knew they were crap, you could take the lost, if you knew they were gold, you could realize a profit. But you don't know.

With insurance, it helps to know whether you need to cash it in. Unfortunately for many, the regulations on Mortgage bonds allowed both a laundered credit rating on these bonds and a great deal of mystery as to whether they hold, as collateral, bad mortgages.

The potential and real liabilities that this has created has both yanked a boatload of money out from under big financial institutions, and made them very uncertain as to whether they can loan out more money, even for things like short-term commercial paper. That's your devastating losses on Wall Street, and your credit crunch, right there.

Some blame the mortgage holders who accepted loans they couldn't pay. But isn't it the responsibility of the mortgage lenders to make sure these people were capable of paying these things back? Who holds the power here? The lenders. They can refuse people, when the evidence shows they can't pay. Folks bring up the CRA, but most of the banks involved in the mess weren't covered by the law to begin with. Those that were covered by CRA, on average, were foreclosed at a lesser rate, originated at a lesser rate, and not backed so much by mortgage bonds and derivatives.

Why did this happen? In no small part because folks wanted to make money without having to put that money out. They wanted to take big risks, but not see those risks on the balance sheets. But in its own way, this system was itself a fraud against investors and against consumers. The lenders were free with these mortgages because they had sold off so much in bonds, and ensured those bonds. Now that's not bad in itself, but the lenders and the insurers created an unregulated mess where the quality of the mortgage no longer mattered in the short term. If the credit default swaps had required full or substantial collateral on their issuance, fewer might have been issued. If the mortgage bonds had been written more transparently, with the composition of its collateral better known, there would be no credit crisis, no black hole sucking in certainty and freezing up bank that lend out money. Nobody trusts anybody anymore.

We have gotten to the point where our central banks can't trust that the other banks have the money to cover their debts, where the money that banks lend each other doesn't seem to be any good.

And then you have absurdities like this, out of the first article:

Buyers of credit default swap insurance are not required to own the underlying securities they are insuring.

In other words, the investor can buy insurance on a mortgage-backed security without having to buy the security itself. When that security turns sour, whoever is holding the credit default contract — whether they actually own the security or not — can demand payment for the face value of the security.

This has created a market in which speculators actually are betting that mortgage-backed securities will lose their value.

Because the market is unregulated, the size of the credit default market is difficult to estimate.

So in essence, we have people actually betting on, standing to benefit from our nation's financial problems. The more pain and suffering our economy goes through, the better for them. These are the perverse incentives that develop in a poorly regulated economy.

What we want in an economy are incentives for healthy financial behavior and penalties for irresponsibility and excess. We pay executives extra millions for their failures, send them to spas, let them enjoy ill-gotten gains as their companies go down in flames, and somehow, with these people in charge, coddled and irresponsible, expect the market to solve all problems.

To be blunt, the market, as we have configured it now, IS the problem. We need regulation, not because people are idiots, but because they're not, and not everybody who is smart and capable is also wise or moral. We have people out there who, when given the responsibility, will betray it for their own benefit.

These people aren't stupid. If they know they'll get caught, if they know they'll get in trouble, the frequency of such actions will decline, if only because the people involved have to be more careful, more sophisticated in their attempts. But any reduction is good, and if we lay down the law sufficiently, we will force them ultimately towards more productive behavior. Additionally, the market forces would then stop being a moral hazard, stop encouraging irresponsible behavior from those who know better, but are obligated to follow the truly unscrupulous when their methods prove most profitable. Our laws have consistently required companies to make money, to return on investments to those putting their money in. It is self-destructive for our nation not to apply laws and regulations to steer these people away from socially and financially behavior that is self-destructive to society and the economy.

Posted by Stephen Daugherty at October 8, 2008 10:30 PM
Comments
Comment #266262

More and more I think people who sold this stuff need to go to jail. I know, they can afford the best lawyers and the laws lag far behind their creative malfeasance - but I’d love to see them have to face a jury of joe six-packs.

Posted by: Schwamp at October 9, 2008 9:32 AM
Comment #266267

Stephen

I wrote on this topic days ago. Blame Clinton-appointed Greenspan for this. He hoped that Wall Street would morally regulate itself. Haha.

BTW.In your last post I also wrote that another bomb shellwould drop this week…and it looks lioke it dropped this morning. According to an article just released by the American Thinker, there may be a connection between Obama’s book abd Ayer’s book. The inference is that Ayers may have ghost written the book. Hmmm….

Posted by: sicilianeagle at October 9, 2008 10:08 AM
Comment #266269

Excellent article: Stephen.
The unregulated and unscrupulous practices that have led to this financial crisis are nothing more than a well-disguised “pyramid scheme”.
It has uncovered the impotency of government and the willingness of government to be co-participant.
With John McCain proposing a $300 billion dollar government buyout of bad mortgages, and the Bush Administration and Congress putting on hold any immediate action on reform and strict regulation, the further raping of taxpayers will continue.

Posted by: Steve Johnson at October 9, 2008 10:14 AM
Comment #266272

So people defaulting on their mortgages has nothing to do with what is going on?

Posted by: kctim at October 9, 2008 10:47 AM
Comment #266273

kctim,

Apparently the changes in accounting principles forced upon business by government after Enron has nothing to do with it either, even though former FDIC head pointed out that had those rules been in place during the S&L crisis, this one would have paled in comparison…

Nope, it’s only the fact that government isn’t ok’ing everything people do that is at fault. Not sure why we still allow that in this country.

Posted by: Rhinehold at October 9, 2008 11:25 AM
Comment #266275

kctim-
Ask yourself a question: what would you do if you knew that the mortgage securities from a certain company were made mainly of risky, high-rate loans? You’d buy other Mortgage securities, or take pause and make the high-risk investment.

Because of that, lenders would be forced to make a choice: gamble on high risk investments, knowing they could crater tomorrow, or take a more conservative approach. Investors might like the high-risk approach, but many, looking to the long-term, would go for the safer investment.

Net result: Mortgage Lenders would make fewer high-risk loans.

Similarly, with the Credit Default Swap, if people knew what the swap was based on, they could call it in. More to the point, though, if those insuring the bonds had to have the money to back their insurance, they would be more cautious, either making more safe investments, or making fewer risky investments.

Some would argue this would slow growth, but growth that gets ahead of the economy’s actual worth is growth waiting to be destroyed. The question is how well the supply of credit maps to what people actually have the ability to back.

The bad mortgages didn’t have to be made. If the banks and mortgage lenders had made it a priority to know what people could pay, and not lend to them whent hey couldn’t, neither the defaults or the credit crisis would have happened. However, the shape of the regulations allowed moral hazards to develop that encouraged and prolonged bad behavior in lending.

SE-
Reagan appointed Greenspan. I recall, dimly, in the distant recesses of my past, that Reagan had some affection for deregulation, and that there were a number of events where deregulation caused major trouble in the markets. S+L crisis being one of them, I believe.

As for the Ayer’s ghostwriting thing, you have got to be kidding me. It’s a bunch of swiftboat-style nonsense. Not having published a lot of stuff doesn’t mean you can’t be a good writer. Having an eye for imagery is not a talent exclusive to former terrorists. Analyzing style is inherently subjective. Show me the payments made to Ayers for that work. Show me the whistleblower with the documents. Don’t hand me this “they write similar so one of them has to have been ghostwritten by the other”

Even if one is the imitation of the other (Ayers would have to be imitating Obama, since he published first), plenty of people who don’t know each other imitate each other. I can count Stephen King, Dean Koontz, David Brin, Terry Brooks, J.R.R. Tolkien, David Eddings, and others among my influences, and the only major author I’ve ever spoken to was John Grisham. And the extent of that conversation was a question at a lecture he gave at my college.

There’s probably traces of them all throughout the fantasy and science fiction that I’ve written (Fast Mover and Tales from the Borderland are examples on this site, if you want a look.) but that didn’t mean that they had to write those passages for me.

So that whole thing seems rather thin for me. It seems like somebody looking for connections rather than finding them. Some people want to believe he didn’t write those books, and that he was more deeply involved with Ayers than he claims to be.

As a writer of fiction, I know the attractions of a good story, and I also know that properly chosen, complete BS can seem incredibly plausible, and absolute truth, badly expressed, can play utterly false. When we deal with this kind of speculation and innuendo, even if we like the implication, we must hold ourselves back and ask ourselves the critical questions about what’s in front of us. What would prove something? What doesn’t prove a thing?

This strikes me as politically edged, but ultimately vague speculation that is meant in and of itself to encourage a premature conclusion on the part of its readers.

Posted by: Stephen Daugherty at October 9, 2008 11:42 AM
Comment #266278

Stephen
Like many people, I am trying to learn more about this and am just curious if people not paying their mortgage has anything to do with this?

Rhinehold
Thanks, I hadn’t heard about the FDIC head.

Posted by: kctim at October 9, 2008 11:50 AM
Comment #266280

Stephen

Re-appointed by Clinton,olf friend. It was then,during the Clinton years that the concept was born,nurtured.

On Ayers:

For you to write 6 paragraphs means that you are concerned that this has legs.

How about this:

When Barry was at Columbia, Ayers was a block away getthing his Masters. In his book, he wrote that he sought out the best radicial minds there.

My prediction: A smoking gun has been found in NYC between the two, which makes the relationship a tad more that a neighborhood thing.

Conclusion: So what? But it goes to judgement.

This issue will cost Barry 1 or 2 points today, and when the Wright and Muslim thing comes out next week, a couple more.

I told you the varsity is just suiting up, didn’t I?

Posted by: sicilian eagle at October 9, 2008 12:00 PM
Comment #266281

kctim-
Yes, it has something to do with it. The question is, why so many at once? Banks and mortgage lenders are supposed to watch what kind of loans they make. They’re supposed to be the ones who make the judgment on who gets a mortgage and at what rate.

They deliberately steered people into more draconian mortgages. As people were less and less able to pay off such mortgages (if they were ever able to pay them off to start with) the added burdens increased the likelihood of those loans defaulting.

They deliberately originated more loans than they knew they could sustain with what they had. They trusted that the bond market for mortgages and the CDS’s would perpetually drain off the risk and liabilities that came with originating those mortgages. When that stopped, they were essentially undone by their own greed. Unfortunately, they screwed up the credit markets in the process by creating a financial weakness in the broader markets, and creating uncertainties about derivatives similar to the credit swaps.

Like I said before, the market, left to itself, would have penalized those who took too much risk. However, the system was rigged by the greedy to cover for that risk.

More and more of our economy has been made dependent on this kind of credit. Prices of goods and availability of them has been made dependent on credit as well. Unfortunately, as it’s shaped up, our system is designed around the notion of keeping people permanently in debt, and making money off the payments and fees they incur for permanently maintaining that debt.

But here we see part of that problem, the corrosive effect of permanent debt. The Predatory economy has caught and devoured itself.

Posted by: Stephen Daugherty at October 9, 2008 12:10 PM
Comment #266284

Sicilian Eagle,

you said:

BTW.In your last post I also wrote that another bomb shell would drop this week…and it looks like it dropped this morning. According to an article just released by the American Thinker, there may be a connection between Obama’s book and Ayer’s book. The inference is that Ayers may have ghost written the book. Hmmm….

Naw, just another load of bird do-do…..:)

Posted by: googlumpugus at October 9, 2008 12:27 PM
Comment #266286

Stephen
If people defaulting on their mortgages led us here, does that mean this would not have happened if they had not defaulted? Or was this something that would have happened no matter what?

Posted by: kctim at October 9, 2008 12:32 PM
Comment #266287

SE-
I seem to recall, from the depths of my oceanic memory…

Ah screw it. ;-)

The Republican Congress played a large role in that, too. Clinton, though, was following the Republican lead, triangulating. That’s what his faction within the party was typical for.

As for the six paragraphs? It was my sincere intent to beat the crap out of that malarkey with a verbal baseball bat. If it raises a feeble hand out for mercy, I will step on the arm and whack it a couple more times in the head. That’s the measure of my annoyance with the author. It’s not my concern that his attacks have credibility, rather my sincere and firm belief that they should be staked and decapitated without delay. You don’t allow that BS a chance to gain crediblity. The truth this time should have its shoes on and show up at the lie’s front door with a shotgun before it leaves for work.

(No, Stephen, [he says] tell me what you really think.)

Ultimately, the evidence from the polls is that these attacks are harming, not helping McCain. People are wondering about things of real importance, and instead of engaging on those matters, McCain has chosen to repeat the trivial crap from the last few elections, which were annoying to people even then, but now seem like a dangerous distraction. He’ll pay for it. Though the attacks appeal to his base, they turn off the independents, who lack much of the concern for associations that Republicans have cultivated among their own. Obama’s no longer the mystery he once was to people, and people look at the calm, collected candidate on the stump, in the interviews, and in the debates, and they don’t seem to square your fire-breathing radical to the man they see in front of them.

Posted by: Stephen Daugherty at October 9, 2008 12:34 PM
Comment #266290

kctim-
The mortgage defaults relates to this collapse the way the traffic on the I-35 bridge relates to its collapse. Take the traffic off, and of course the bridge wouldn’t have collapsed that day.

That said, the system shouldn’t have been so weak in the first place. The investors in these should have had the meaningful, accurate information to know that their Lenders were giving out too many loans. The CDS’s and Mortgage Bonds shouldn’t have been constructed, as they were by Phil Gramm’s legislation, to become a black hole of financial accountability. These people didn’t take these risks because had to, they took them because they could.

It’s the lender’s job in the market to make sure their borrower can pay things back. They didn’t do that, because they were confident that they could take any risk and just pass it on.

If it had been more difficult to do so, they would have told more people no out of their own self-interest, or wrote out loans that people were better able to repay.

Posted by: Stephen Daugherty at October 9, 2008 12:56 PM
Comment #266292

Sicilian Eagle:
Voters, as gullible as you may want to believe them to be, are well aware of whose administration has plunged them into an abysmal financial uncertainty; a republican administration.
I have news for you, smart voters that have voted republican in the past, will cast party affiliation to the wayside and vote their pocketbooks.
And there are more of them then you and the McCain camp may want to admit.
Voters are parents, students, small business owners, consumers, investors, veterans, single parents, retirees, teachers, blue-collar workers, homeless, middle class, affluent, nurses, doctors, fast-food franchise workers, etc., etc.
As a former political strategist, and someone who is an objective observer, here is a prediction: you and McCain’s strategists will learn a hard lesson in American politics on election night.
Hope is a far more effective word in a time of crisis than the word fear.
The more that McCain concentrates on destroying Obama, the more voters understand that McCain’s temperament for the presidency is questionable.
America needs a strong leader in this time of terrorist danger and financial crisis.
McCain is not that man.

Posted by: Steve Johnson at October 9, 2008 1:05 PM
Comment #266295

Stephen
People have to drive on bridges, they don’t have to get mortgages. And while I agree that “it’s the lender’s job in the market to make sure their borrower can pay things back,” its also the borrowers job to know the terms and limits of what they are borrowing.

So far it sounds as if greed from the top and bottom, are to blame.

“If it had been more difficult to do so, they would have told more people no out of their own self-interest, or wrote out loans that people were better able to repay”

So people who say govt “encouraged” lenders, are lying?

Posted by: kctim at October 9, 2008 1:40 PM
Comment #266300


Does it really matter whether the varsity or the practice squad is playing the game when the game is rigged and the same two teams take turns winning the super bowl year after year. Irreguardless of which team wins this year, most of the fans will be losers.

If you don’t punish the two teams for rigging the game, why bother playing the game, just flip a coin to determine the outcome.

Stephen D: “Clinton, though, was following the Republican lead, triangulating. That is what his faction within the party was typical for.”

The Democrats have put a lot of emphasis on the Gramm bill as the cause of much of what has happened. In case you missed the vote, 90 Senators and something like 387 Representatives voted for that bill. Apparently the Clinton faction consisted of most of the Democrats in Congress. and most of them are still there and now the majority in Congress.

You are demonstrating a classic case of denial. Denial is one of the things that Republican and Democratic voters are famous for. Another, is blaming the other guy. A third, is rigging the election process to deny other parties an equal opportunity to compete. Money, money, money!

Posted by: jlw at October 9, 2008 2:00 PM
Comment #266303

kctim-
People don’t have to drive on bridges either. It just dramatically increases the success rate for crossing rivers, streams, and gullies, just like Mortgages increase home-ownership among those who are unable to pay rent and sock back savings for a new home as well.

It is not the homeowners job to pay back the mortgage. That’s just the obligation they’re required to honor so they can keep the house they’ve bought. It is, explicitly and literally, the job of the lender to be careful with the money they’re lending out. That’s their business.

It is not so much the government encouragement of lending that is the problem. If government encourages loans, and those loans get paid back, everybody wins. The problem when the government allows the methods of lending to become too aggressive. The problem came when they allowed financiers to take a system that would work fine defraying the costs of good mortgages and encouraging further origination, and allowed it to used to hide and launder risky originations and investments.

Posted by: Stephen Daugherty at October 9, 2008 2:12 PM
Comment #266307

correction: unable to pay rent and sock back saving so for a new home at the same time

Posted by: Stephen Daugherty at October 9, 2008 2:27 PM
Comment #266308
Yes, it has something to do with it. The question is, why so many at once? Banks and mortgage lenders are supposed to watch what kind of loans they make. They’re supposed to be the ones who make the judgment on who gets a mortgage and at what rate.

And, of course, our government made it ‘risk free’ to take on high-risk loans and even required banks to give them out. Not the single fault, but it didn’t help.

A ‘perfect storm’ of default credit swap market not knowing what the baseline market value was, requirements for mark to markets and the housing boom crashing (partially because of people taking ARMs out without thinking that their payment would go up much) caused the problem.

And of course, the Republican AND Democratic congresses did nothing to identify it and take measures to head it off by lifting the post-Enron accounting rules in this case or regulating the FMs (Dodd and Frank told us that they were fine).

As for the ‘permanent credit’ philosophy being gone now, GOOD. That is the best thing that has come out of this whole mess.

Provided you are right. I doubt it because we just invalidated the risk with this bailout. No one will learn anything and this is evidenced by neither major party candidate acknowledging that they will have to pay down the debt.

Posted by: Rhinehold at October 9, 2008 2:32 PM
Comment #266310

Stephen
Ok, good one, people don’t have to drive on bridges. But, it is their responsibility to research and learn about the route they are taking. If they don’t and they get lost, are you going to blame the bank who helped them buy the car they got lost in? I doubt it.

Come on Stephen, even though I do believe it is a duty to pay back a loan, I didn’t say it was the “homeowners job to pay back the mortgage,” did I?
I believe I said” “its also the borrowers job to know the terms and limits of what they are borrowing.”
I’m not excusing the lenders actions on this at all, but I’m not discounting the borrowerers part in all this either.

By your statement, I take it that govt did encourage lenders to loosen up their lending requirements. Wouldn’t this be govt intervening in something that was going along ok? I wonder why govt decided to start regulating who, where and why lenders gave loans to?

I don’t know Stephen. It still sounds like borrowers, lenders and govt all took risks that didn’t pan out, to me.

Posted by: kctim at October 9, 2008 2:47 PM
Comment #266311

No one will learn anything and this is evidenced by neither major party candidate acknowledging that they will have to pay down the debt.

Similar to the enron fraud, people are just good at beating the system and leaving others holding the bag. There’s only one way people will learn. That is to jail some executives who sold securities that they couldn’t honor - that’s called fraud. I’m not talking about some country club jail but the real thing where they got to take it all the way.

Let our next generation see the fine line between pulling in hundreds of millions and getting raped in prison. This creative fraud will end real quick. When a CFO comes up with a great new idea to make big money on creative financing they’ll get tossed out of the CEO’s window on their ear.

Posted by: Schwamp at October 9, 2008 2:59 PM
Comment #266312

Rhinehold-
The CRA did not require them to hand out loans, it just required them to hand them out fairly. Less than twenty-five percent of the loans in question were originated under institutions which had to follow its regulations, anyway. The worst and most prolific originators were not even covered at all.

But what if they had been?

The reality is, much as you’d like to spread the blame evenly, it just refuses not to bunch up on the right. This whole permanent debt philosophy was an outgrowth of a policy that sought to slow wage growth. If people could use more credit, you wouldn’t have to give them as many raises, or as many benefits. This was meant to rein in inflation.

What happened, despite that, was that the costs of different items went up, even though they were supposed to remain the same. A cash economy feels the rise in prices faster than a credit economy.

As for whether they learn their lessons? Some do, but I think some don’t want to learn that lesson, just find a way to avoid being taught it or reminded of it, one way or another.

Posted by: Stephen Daugherty at October 9, 2008 3:05 PM
Comment #266319

jlw-
The Democrats have experienced their renaissance because they did not sit around whining about how the system disadvantaged them, but instead actively turned around and pushed for things.

The line that there was no difference between Republicans and Democrats is a pernicious one at best. While the Washington politicians sometimes act alike, and sometimes serve the same special interests, we have seen the illusion in that premise with the tenure of George Bush.

The real problem is that Republicans, while appealing to the center have taken things in anything but a centered direction. The expectation that a McCain administration would be no different from an Obama administration is naive. There would be significant differences.

In Congress, things are trickier, but I believe that a pliable Democrat is better than a committed Republican. The Republicans are difficult to sway on the issues that matter. The Democrats that emulated them are more accommodating. We can always replace them over time, once we’ve got more votes behind us.

I don’t expect progressive politics to take over all at once, but I do expect the direction of the wind to start changing, and many of the questionable Democrats to start bending in that particular direction as well.

kctim-
To be honest, I would tell people to stay back from the margins on what you can afford. It’s never a good idea to leave yourself with little margin for error. Honestly, though, I expect the lender to know their business better than the person who perhaps has to think about matters like this once or twice in their lives. I also expect them not to put people who aren’t professionals in this business in a position where they aren’t capable of knowing the problematic position that they’re in.

I don’t mind lenders telling people they’re out of luck if they can’t prove certain things, provide certain documentation. Borrowers must be responsible, but the inequality of the relationship must be recognized if the regulation is to be set correctly.

Posted by: Stephen Daugherty at October 9, 2008 3:47 PM
Comment #266324

Stephen:

Can’t blame the Dems for anything,ever..right Stephen?

I remember you going to bat for Murtha last year when I was the most prolific writer on the right side next to Jack. I was right then,pal. Murtha was a skunk.

If Reemer ever let me back posting columns, all hell would break loose with you lefties, but I am content to jump into my favorite leftie’s thread now and again and give my two cents worth….

However, you are still the WB jewel!

On this issue of Barry and Ayers: It looks like Both guys were within 400 yards of each other for 2 years in NYC. Both hung out at the same places. You know what? People are there RIGHT NOW researching this thing, and if by the grace of God a connection is made betwen the two….well you know where I am going here. Instapundit, Gateway Pundit, Sweetness and Light, even Michele baby are on this thing…which means that in 48 hours it hits the MSM.

On a different note:

How, 25 days before the election, this thing isn’t a complete rout is staggering to me.

If, for some reason, McCain steals this one…the Democratic Party should fold up and start again.

McCain is withing distance today…yikes…


Posted by: sicilianeagle at October 9, 2008 3:59 PM
Comment #266330

Anyone remember the Elliot Spitzer article in the Washington Post earlier this year?

Here is the link to the article.

He wrote about how several of the State Attorney Generals were warning about the predatory lending taking place, and how several states were putting in laws to curb these types of loans. Then in 2003 the Office of the Comptroller of the Currency (OCC) acting on behalf of the Bush administration used an obscure clause that was written during the Civil War to block any state laws that would stop these predatory lending practices.

Isn’t it an odd coincidence that within a few weeks of this article, the Federal investigation of Spitzer using prostitutes became public? Almost like they were trying to dicredit him.

Posted by: pops mcgee at October 9, 2008 4:39 PM
Comment #266347

Stephen

It’s 5:45pm EST and the story hit Fox. Tow days early…wow!

Posted by: sicilian eagle at October 9, 2008 5:39 PM
Comment #266349

If Reemer ever let me back posting columns, all hell would break loose with you lefties, but I am content to jump into my favorite leftie’s thread now and again and give my two cents worth
After reading what you post I can understand why he would not. why cant you? no substance — just innuendo and pipe dreams — Savage

Posted by: A Savage at October 9, 2008 5:53 PM
Comment #266351

SE-
I think I’ve addressed this before: The Republicans are first. Then the Democrats who helped get us into this mess. The reason for this is that the Republicans have proven themselves boldly and unrepentantly uncooperative on the subject. The Democrats, we feel, might be scared straight, or left no political excuse to continue their Reaganism.

Murtha’s no saint, but the Republican party stooped pretty low attacking his patriotism and appreciation for his fellow soldiers. Part of the reason why I’m being harder on the Republicans right now is that I don’t trust them to observe reasonable limits on their politics. They seem at this moment, to have buried whatever scruples they had in the interests of trying to revive their political fortunes. I plan to help dash those fortunes so they learn their political fortunes and rejoin the rest of us on Planet Earth. Once they’ve humbled themselves sufficiently, then I might consider letting up on them.

As for Ayers? Given the population concentration of both cities, Obama also lived within four hundred yards of tens of thousands of other people. But even given that, how does that constitute agreement? I’ve got conservatives on both sides of me, within such a distance. Why am I not a Republican?

As for the research, they’ve had all year to do it. It’s bunk, and saying folks on Fox brought it up doesn’t lend it much credibility.

Worse yet, if somebody actually picks up on it, I think it’s pretty likely to get slammed down hard.

But you know, when they can’t win on the issues, lying is all the McCain campaign has left.

Posted by: Stephen Daugherty at October 9, 2008 6:05 PM
Comment #266356

For Stephen Daugherty, his favorite fictional POTUS and for Ray Guest, his favorite celebrity:

http://www.funnyordie.com/videos/06ae3d8563

For Aquilus Advocatus Sicilianus:

“Why may not that be the skull of a lawyer?
Where be his quiddits now, his quillets, his cases, his tenures,
and his tricks? Why does he suffer this rude knave now to knock
him about the sconce with a dirty shovel, and will not tell him
of his action of battery? Hum! This fellow might be in’s time a
great buyer of land, with his statutes, his recognizances, his
fines, his double vouchers, his recoveries. Is this the fine of
his fines, and the recovery of his recoveries, to have his fine
pate full of fine dirt? …”

DRRemer should relent so we can have some more fun.

Posted by: ohrealy at October 9, 2008 6:34 PM
Comment #266370

A bit of unintentional humor here from the eighties regarding McCain.

On the plus side, this could help him with the Log Cabin Republicans!

Posted by: Stephen Daugherty at October 9, 2008 7:56 PM
Comment #266373


SE: Calling liberals lefties is an insult to lefties.

The left has no voice in politics and conservatives and liberals have conspired for years to insure that the left never has a voice.

I guess your idea of a leftie is anyone left of NEOCON.

Posted by: jlw at October 9, 2008 8:40 PM
Comment #266377


Stephen D.: For 40 years, I have been voting for Democrats and waiting for them to move in a Progressive direction. How long are you willing to wait?

Posted by: jlw at October 9, 2008 9:04 PM
Comment #266383

Stephen,

That ‘bit of humor’ just made my day…thanks…and, xoxoxoxo to you too!

Posted by: Marysdude at October 9, 2008 9:35 PM
Comment #266384

jlw-
Who said anything about waiting?

Look at what we’re doing all over the country. Our intent isn’t to wait for things to get better, it’s to push for them now. Don’t worry about the progressive agenda. Today’s newest Democrats aren’t going to wait for it to just happen on its own.

We’re not going to wait for somebody else to do what’s necessary.

Posted by: Stephen Daugherty at October 9, 2008 9:43 PM
Comment #266407

pops mcgee,

Of course, Spitzer was exposed for politics. He had made many enemies. That doesn’t excuse his stupidity or sense of privilege.

Posted by: googlumpugus at October 10, 2008 12:25 AM
Comment #266410

Critics of Isaac’s proposal, however, say that the SEC’s mark-to-market accounting rules were set up so that investors would always know the value of the assets on a bank’s books.

Isaac’s suggestion “is like an ostrich hiding from its problems,” said Peter Schiff, an investment adviser and author of “Crash Proof: How to Profit from the Coming Economic Collapse.” “You need to know what assets are worth. You have to expose which institutions are insolvent and prevent them from taking more deposits.”

The reason that Japan took a decade to emerge from its economic crisis in the 1990s is that it obfuscated its financial problems with accounting rules that allowed its banks to hide their problems, Schiff and others said. Clarity is what investors want and they will not invest money in any company they feel is hiding its problems.

“Suspending mark-to-market seems to muddy the waters, which does nothing to bring in equity investors,” said Paul Kasriel, chief economist for Northern Trust. “If you want to make believe, go ahead. But it doesn’t seem to be the most productive measure going forward.”

Isaac bristled at the notion that suspending mark-to-market rules makes the financial system less transparent.

“I’m not saying cover anything up,” Isaac said.

He explained that “in the good old days, before the SEC started monkeying around with the financial system,” banks provided investors with all the information they could have possibly wanted about assets in their investment portfolios. The difference was that if an asset lost 60 percent of its value, banks did not have to reduce their earnings by a similar amount and they did not have to scramble to come up with additional capital to assure investors that they were safe and sound.

Posted by: googlumpugus at October 10, 2008 12:32 AM
Comment #266422

jlw

The Clinton faction of the Democratic party would be the best example of a center/left school of thought that Republicans could(barely) live with. The Obama faction is WAY left of them….closet Socialists. Mainstream America will tire of him.

Orealy

David wanted me to quote sources when I wrote articles. Link to intelligent and insightful arguements to butress my sources. Since I am usually the quoted source, I didn’t want to adapt my writing style. In fairness to David (who I really realy like and respect by the way..the guy does WB as a labor of love for heaven’s sake), he didn’t kick me off WB, rather I kinda quit as I wanted unfettered discretion is posting what I wanted in the manner and fashion that I wanted. As I recall, the issue was about a piece about Murtha the day the marines were acquited. I hammered him pretty well on that piece, but David felt I went over the line I guess. Still, all the guys on WB are the best, and Stephen and David are on the top of the list. I do miss Jack very much though, as I do Joebagadonuts, Adrienne(God, I loved her), and a bunch others on the left and right that used to respond.

I defended Rummy and Bush, for Pete’ sake…what did you expect? Intelligent converstaion right smack in the middle of a war going bad?

Posted by: sicilian eagle at October 10, 2008 6:09 AM
Comment #266429

SE-
For me, the thing about good sources is that they put the cake beneath the frosting of rhetoric.

As a writer of fiction, I’ve been confronted with just how far one can take words from truth. Sources, properly interpreted, can provide a backbone to an argument.

Unfortunately, the Right literally likes to hear itself talk. That’s not good for any political system. My policy is, if I get information through a liberal blog, I typically click through and look at the source. Your favorite blogger can get things wrong, so it helps to catch his or her mistake before it becomes yours. One reason I’m doubtful of many Republican sources is that I follow their information back and find the sources they use are either dubious, or misinterpreted for the sake of the talking points.

The Republicans need to become free agents from the Washington Party. As long as they depend upon party loyalists for their information and thinking, they can’t adjust to the times (why would the Washington Republicans want change?) and they can’t nail the bulls*** to the floor before it becomes a credibility problem for their party and policy.

Posted by: Stephen Daugherty at October 10, 2008 8:23 AM
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